EUR/USD Can’t Hold Its Break as Mideast War Makes Greenback Favorite Again
For currency traders, it’s hard to be a bull of anything except the dollar, it seems.
The EUR/USD is one of those forex pairs on the backfoot again this week after finally building some upward momentum from the middle of last week to Friday, as it caught a break from the double whammy of a Dollar Index at 11-month highs and US Treasury yields at 16-year peaks.
As of Monday, the magic was gone for anyone who had turned long on the euro — or even contemplating it — as the weekend events in the Middle East led to refocus on geopolitical risk as never before since the Ukraine invasion.
Coming after the 2019 raid on Saudi oil facilities by Houthi rebels and ending four years of relative peace in the region that prevailed through the coronavirus pandemic, the flare-up in Israel-Palestine fighting ignited by the Saturday attacks of militant group Hamas on Gaza has also heightened the risk aversion in place since the start of October.
In its safe-haven role, the dollar is again the king of the forex heap, rubbing a little shine off everything it’s been paired with — even gold, as the spot price of bullion wallowed in the red again after a one-day rally Monday.
We’ll get to a detailed study of the EUR/USD outlook imminently with Investing.com’s regular technical charts collaborator Sunil Kumar Dixit. But let’s first examine market events and variables that may influence the euro-dollar relationship.
A number of officials from the US central bank are due to speak later Tuesday, ahead of the release of the minutes of the September monetary policy meeting on Wednesday and Thursday’s US Consumer Price Index data.
CPI data, due on Oct. 12, is expected to grow 3.6% in the year September, a notch lower than the 3.7% registered in
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